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Mr . Wong, began his role as Finance Manager at Sincere Sweet Limited ( SSL ) , a Hong Kong - based company, on 1
Mr Wong, began his role as Finance Manager at Sincere Sweet Limited SSL a Hong Kongbased company, on May His responsibilities included overseeing and managing the operations of SSLs various group companies across the Asia Pacific region, including Hong Kong. Throughout his employment, he has had to travel to different Asian cities, spending days outside of Hong Kong in the year ending March
For the year ending March Mr Wong's income and expenses included:
i a monthly salary of $
ii a monthly travel allowance of $
iii. On November he bought a flat in Hong Kong for $ million, mortgaging it for $ million. SSL agreed to cover any mortgage interest over per annum. From
November to March he paid $ in interest and received a $
subsidy from SSL
iv After moving into the flat, SSL arranged for a domestic helper costing $ per month and covered his utility bills, totaling $ for the five months ending March SSL also provided a car and driver, with the car leased in SSLs name for $ per month and the driver hired for $ per month. Mr Wong paid the $ in petrol and maintenance costs, which were reimbursed by SSL The car was used for both business and personal purposes, with an : ratio.
v Due to an accident, Mr Wong was hospitalized for days, incurring $ in medical costs. was covered by insurance, and he claimed the remaining balance from SSL
vi SSL also reimbursed half of his $ annual gym membership fee.
vii. He received a discretionary bonus based on SSLs profitability, with $ paid in April for and $ paid in January for He donated half of these amounts to The Community Chest of Hong Kong.
viii. Mr Wong also enrolled in an MBA program at Hong Kong Metropolitan University, paying $ in tuition fees. He made mandatory contributions of $ to the MPF scheme and paid $ in qualifying annuity premiums on January Mrs Wong is a housewife and they have a yearold son. Mr Wongs father, aged lives in a registered nursing home in Macau, to which Mr Wong paid $ in residential fees. His mother, aged lives in Macau, and he sends her $ monthly for living expenses.
Required:
a Compute the Hong Kong salaries tax liability of Mr Wong for the year of assessment assuming that he would claim whatever deductions or allowances which are applicable. Ignore provisional tax and any tax reduction in your calculation.
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b If later Mr Wong receives a Notice of Assessment from the Inland Revenue Department and finds that it is not correct, state what he should do in order to lodge an objection against the Notice of Assessment.
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c With reference to the Inland Revenue Ordinance, discuss the liability test and convertible to cash test which used to determine the taxability of fringe benefits under an employment. Comment on Mr Wongs remuneration package whether it is an effective tax saving arrangement.
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